Octorara Area School District 2018-2019 Budget Presentation February 19, 2018

2018-19 Final General Fund Budget Summary Total Revenues $53,279,263 General Fund Budget Document Total Expenditures $55,220,744 Deficit ($1,941,481) Anticipated Budget Results Budget Contingency $350,000 Debt Service Savings $337,681 Anticipated Use of Fund Balance ($1,253,800) When we passed a resolution in January to stay at the index (meaning that any tax increase will not exceed 3%) we had total revenues budgeted of $53,279,263 and expenditures budgeted at $55,220,744 resulting in a deficit of $1,941,481. This deficit includes a budgetary contingency of $350,000 an amount needed for an emergency that we hope we don’t need to spend. Also our budget includes some one time debt service savings in the amount of $337,681 that we will not have to spend. This results in a final anticipated deficit for 2018-2019 of $1,253,800. This deficit would be covered by our general fund balance which was $ 8,806,090. Also this budget includes the full Act 1 tax increase which raises approximately $1 million in tax revenue ($925,915)

Octorara Area School District New Information: Governor’s 2018-2019 proposed budget increases over our current budget amount for BEF, SEF and Career Training revenue by $209,000 Employer’s retirement rate citified by PSERS – Net reduction of $56,601 (Reduction of $113,202 in expenditures and a reduction of $56,601 in state subsidy revenue) Contracted Services ? The Governor’s 2018-2019 budget proposes to increase basic education, special education and career training subsidies. These three increases combined = $209,000 over what we currently have in the budget. We will be adding these amounts to the budget going forward. These are not the final allocations, we will know those in June however they should be close. Also, we budgeted 34.18% for PSERS however the certified rate is lower. We will be able to reduce our PSERS expenditures by approximately $113K . Also since our January meeting we have been working on some contractor agreements and foresee some additional savings after final agreements are reached.

2018-19 Final General Fund Budget Summary Total Revenues $53,431,662 General Fund Budget Document Less Total Expenditures $55,107,542 Deficit ($1,675,880) Anticipated Budget Results Budget Contingency $350,000 Debt Service Savings $337,681 Anticipated Use of Fund Balance ($988,199) Adding the additional state subsidy revenues, adjusting for PSERS changes and reducing expenditures for PSERS our new buget numbers look like this. Total Revenues $53,431,662, Total Expenditures $55,107,542 with a budgeted deficit of $1,675,880. Again we need to also back out our contingency of $350,000 and the debt service savings resulting in an anticipated deficit of $988,199.

Questions .

Octorara Area School District 2018-2019 Budget Presentation January 15, 2018

Octorara Area School District New Information: Act 1 Index Apply for Exceptions and Pass Preliminary Budget Can Still Pass Resolution to Stay Within the Index of 3% Chester County and 3.2% for Lancaster County Employer’s retirement rate citified by PSERS for 2018-2019 is 33.43% In December I informed the Board that because of the reassessment in Lancaster and a cap on Lancaster’s levy imposed after reassessments combined with a rebalancing that requires an increase the Lancaster levy we would not be able to consider raising the millage rate to take the Act 1 index increase. PDE’s budget document 2028 the official budget document reported a validation error when we prepared both a resolution to stay within the Act 1 index and if we passed and submitted a preliminary budget showing including the Act 1 index increase. We were advised by PDE to consider applying for exceptions to keep all options open until a final resolution was reached on how to calculate the Lancaster levy cap in a two county system. As of late December PDE has reviewed the process and has ruled that Lancaster’s tax levy should be calculated after rebalancing and that we are able to increase our tax levy and mills up to our Act 1 index. Our agenda item for January is to pass a preliminary budget including applying for exceptions. We can now consider passing that budget and filing for exceptions or we can add an agenda item to pass a resolution to stay at or below our Act 1 index of 3% (3.2% for Lancaster since the prior year’s index is used during a year of reassessment) We budgeted 34.18% for PSERS however the certified rate is lower. We will be able to adjust the budget by a net of $75K.

2018-19 Final General Fund Budget Summary Total Revenues $53,279,263 General Fund Budget Document Total Expenditures $55,220,744 Deficit ($1,941,481) Anticipated Budget Results Budget Contingency $350,000 Debt Service Savings $337,681 Anticipated Use of Fund Balance ($1,253,800) If you recall our preliminary budget : With a 3.% increase our General Fund budget will show total revenues of $53.3 Million and $55.2 million in expenditures with a budgeted deficit of $1.9. However we do not anticipate having a $1.9 million deficit since we know that we will have approximately $337K in one time debt service savings and we do not anticipate using the budget contingency of $350K resulting in a deficit of $1.25Million.

Questions That brings us to what we have to do tonight. We do have the options of 1. Passing a resolution to stay at or below the Act 1 index, 3.% max increase. 2. Pass a resolution to authorize the Administration to display a proposed preliminary budget and then vote on that budget at a January Board meeting.